Testimony of Darrell S. Gay, Esq,

Madam Chair, Madam Vice-Chair, Commissioners, officers, employees and invited guests, my name is Darrell S. Gay. I am an attorney with almost 30 years of dedicated practice in the area of labor and employment law. During those years I have worked in and with federal government law enforcement agencies, state and local government regulatory agencies, a host of institutions including hospitals and private law firms large and small. For many years I was a small employer myself running my own boutique law firm dedicated to the representation of employers in labor and employment law matters.

I also have been active in professional and civic organizations whose missions impact upon diversity and affirmative action. For example, I was a member of the founding board of the Minority Corporate Counsel Association [MCCA], an organization that advocates the expanded hiring, retention and promotion of minority attorneys in corporate law departments and law firms. Similarly, I am the chair and a founding board member of the National Employment Law Council, the leading association of minority management-side employment lawyers. In addition, I was a member of the Diversity Committee of the Association of the Bar of the City of New York [ABCNY] which drafted and issued a Statement of Diversity Principles for the Association’s multitude of members. These Diversity Principles have subsequently been signed and adopted by most of the major law firms in New York City. However, please note that in my appearance here today, I am speaking only for myself and have not been engaged to speak on behalf of these organizations, as much as I am certain that they would collectively agree with what I have to say.

Today’s meeting is prompted by the recent action of the Commission in issuing a new Compliance Manual section updating guidance on how Title VII of the Civil Rights Act of 1964 prohibits discrimination in employment on the basis of race and color. I have been invited to speak in support of the business case for workplace diversity activities by employers in the private sector and the continuing need for the EEOC to support such corporate activities, including affirmative action. I am pleased to be with you and to have this opportunity to share my thoughts on these most important topics.

The question of whether voluntary affirmative action [and workplace diversity] practices in the private sector violate the letter or spirit of Title VII of the Civil Rights Act of 1964 has been a subject of contentious debate throughout my legal lifetime. Legal challenges to such practices have been a constituent of the development of Title VII law since the outset. Despite these challenges, affirmative action remains a valid course of business conduct and one that has been firmly endorsed and promoted by the federal government through multiple administrations of both major political parties. While certain activities carried out in the name of affirmative action have been limited, the core concept of taking legally permissible positive steps to end discrimination, to prevent its recurrence, and to creative new opportunities that were previously denied minorities and women has not been eroded.

However, efforts to kill affirmative action remain a consistent drumbeat which has only intensified with the passage of time since Title VII’s enactment. Its critics charge that the civil rights laws have done their job, that the playing field is now level, and that continuing affirmative action 25, 30, 35 or 40 years after Title VII’s enactment is sanctioning discrimination in the name of ending discrimination. To the contrary, the statistics of the workplace reveal that the color blind society which the laws are designed to foster has yet to emerge. We may well get there some day. I certainly hope so, but we are not there yet.

With its decisions in Grutter v. Bollinger, 539 U.S. 306, 2003 US Lexis 4800 (2003) and Gratz v. Bollinger 539 U.S. 244, 2003 US Lexis 4801 (2003), [collectively the University of Michigan cases], the Supreme Court stated that the value of diversity in higher education is more than a campus experience. By finding that there is a compelling state interest for race conscious affirmative-action programs, the Court reiterated what the vast majority of Corporate America had already recognized – efforts to create racial diversity are essential to the achievement of organizational success. The Supreme Court decisions stemmed from the University of Michigan’s admissions process at its law school and undergraduate school. While focused on the admissions process in the arena of public higher education, the cases are significant for employers because they affect the validity of using race [and by implication, gender] as a factor(s) in any employer based affirmative action and/or diversity program.

In both decisions, the Supreme Court had the burden of deciding whether the University’s practice of using race as one factor in the admission process was a lawful means of achieving diversity among the student population. The Court determined that having a diverse student body serves a “compelling state interest” and that as long as the University’s admission policy was “narrowly tailored” to achieve that goal, using race as a factor in the admissions process violated neither Title VII nor constitutional principles. On the one hand, the Court held that the law school’s use of race in its admission policy was intended to ensure a “critical mass” of minorities on the campus, and is a lawful means of achieving campus diversity.(1) On the other hand, the Court found that the undergraduate school’s policy of assigning twenty additional points to “underrepresented minorities” was the “functional equivalent of a quota”, not narrowly tailored to achieve the compelling interest of diversity, and thus a violation of the equal protection standard.

Although the University of Michigan results were a split decision, the fact is that in so far as 5 – 4 decisions go this is a decisive victory for race-conscious affirmative action. By ruling unequivocally that student body diversity is a compelling state interest that can justify the use of race in university admissions, the Court majority adopted the rationale of Justice Powell’s opinion in Regents of the University of California v. Bakke, 438 U.S. 265 (1978). Thus, while that standard has been the de facto touchstone for constitutional analysis of race-conscious admissions policies, the Grutter decision raises its status to that of a clear majority holding of the Supreme Court. While subsequent changes in the composition of the Court have fueled speculation on how it will respond when next confronted with these issues, the fact of the precedent established by the Michigan cases remains unchanged. Certainly nothing about the existing situation compels the EEOC to consider revising its position on the issue in anticipation of possible subsequent Court reinterpretation.

These decisions also clearly reflect the Supreme Court’s recognition that achieving a diverse student body is not only a compelling interest on public university campuses, but also in the business world. A diverse university student body broadens the pool of trained and qualified candidates for employers who seek to increase the numbers of minorities and women within their workforces. This desire to increase numbers was clearly evidenced by sheer numbers of the major corporations that filed amicus curiae briefs in support of the University’s affirmative action programs.(2)

The interest and leadership of corporate America in striving for a more diversity balanced workforce has been spawned by many factors. Principal among them are the changing demographics of the United States. As reported by the U.S. Census bureau, the African-American population as of July 1, 2005 was 39.7 million, the figure represents an increase of half a million than the year earlier representing 13.4 percent of the population.(3) Latinos were 42.7 million, increasing 3.3 percent from the previous year, representing 14 percent of the population. In 2005, the nation’s minority population totaled 98 million, or 33 percent of the country’s population.(4) These mid-decade statistics provide further evidence of the ever increasing diversity of our nation’s population. The Census Bureau predicts that by the year 2030, the nation will be 19.4 percent Latino and 14.1 percent African-American, and further that by the year 2050, the nation will be 24.3 percent Latino and 14.7 percent African-American.(5) These statistics demonstrate the need for deliberate and effective actions by employers to recruit, train, and engage the diverse population of our nation.

The decrease in the diverse population at UCLA since the passage of Proposition 209, which bans the use of affirmative action in government contracting and hiring as well as university admissions, illustrates the effects that can occur when deliberate and effective action to foster diversity is not taken. It is reported that ninety-six black students enrolled in the University of California-Los Angeles freshman class in fall 2006, the lowest number in the past ten years. Of the 10,487 students admitted to UCLA in fall 2006, about 2.3 percent were black. It is reported that prior to the passage of Prop. 209, UCLA had the highest number of Africa-American freshmen in the University of California system.(6) Similarly, in Washington State, according to The Seattle Times, four years after Proposition I-200 passed which also bans the use of affirmation action in government contracting, the share of Seattle public-works contracts, subcontracting opportunities awarded to minority or women-owned firms decreased by more than 25%. Prior to Proposition I-200, 30% of overall Seattle city construction dollars were awarded to women and minority contractors.(7) Both experiences at UCLA and Washington State demonstrate the continued need for deliberate actions or plans to foster diversity.

Also implicated in this heightened interest in the topic of diversity is the rapid globalization of commerce that has taken place over the last quarter of the 20th Century. Anyone who reads newspapers or magazines, watches television or cable news, or listens to the radio must know that the global marketplace is a reality. American companies now compete not just with the companies down the street or across town, but also with companies in other countries. If American companies are to prosper in this global competition, they need to maximize market share by every means at their disposal. In order to enhance its market share and remain successful, the typical American company must maintain a strong diversity posture that both reflects and returns value to the global communities which it serves. Thus, the mainstream of the American business community recognizes that future viability depends upon embracing and attracting diverse markets and customers, engaging diverse suppliers and contractors, and reflecting that diversity internally in terms of the people (the employees) who are their most public corporate embodiment.

Affirmative action programs in universities and in corporate America strive to create an American workforce that can effectively reach and deal with these present and future consumers, suppliers and competitors. Furthermore, as the Supreme Court stated, the benefits of a diverse workforce are “not theoretical but real, as major American businesses have made clear that the skills needed in today’s increasingly global market place can only be developed through exposure to widely diverse people, cultures, ideas and viewpoints.” By affirming the value of affirmative action, the nation’s highest court has given universities and corporate America the time and the ability to bring real workforce diversity to this country.

However, even with these laudable affirmative action goals in place, and in light of the Supreme Court’s holding that race can be used as a factor in the law school’s admission process, employers are still struggling with how to be effective in creating a diverse workplace without using unlawful quotas or other unlawful practices to achieve that goal. Legal employers and law firms in particular, are no less subject to these problems than those involved in other industries, and I will refer to them specifically because of my own knowledge and experience in this realm.

Increasingly throughout the 1990’s and up to today, law firms in the U.S. have been under pressure to address the low levels of representation of women and people of color within their ranks. Much of the pressure has come from the corporate clients which those firms depend upon to generate the legal fees that are their lifeblood. Corporate general counsel increasingly have diversified their in-house ranks and demanded that their outside counsel pay attention to the issue of diversity as well. Additionally, various national and regional bar groups, employer associations and other advocacy groups have picked up the drumbeat calling for greater diversity in the legal profession.

In response, nearly every major law firm in the country has launched diversity initiatives focused initially on the recruitment of women and minority attorneys. As a result, the ranks of minority and women law firm associates increased substantially during the 1990’s, with the total minority population nearly doubling from the beginning to the end of the decade. Women now account for nearly 40% of the attorneys in the larger firms and minorities constitute 12.6 per cent. However, change at the partnership level is slower in developing. As you know, EEOC’s own study on this issue in 2003(8) found that in terms of making partner at major law firms, white males have five times better odds than women, four times better than Latinos and seven times better than African-Americans or Asians. National Association of Law Placement [NALP] data for 2005 further reveals that attorneys of color account for 4.63% of the partners in the nation’s major law firms and that women account for 17.29% of the partners in these firms. This compares with 4.32% and 17.06%, respectively, in 2004. These numbers suggest that, relative to the attorney population as a whole, and relative to the demographic composition of law school enrollment, women attorneys and attorneys of color continue to be under-represented among partnership ranks at these firms.(9) The numbers continue to lag even though the representation of women and minorities graduating from law schools has increased substantially.(10) Thus, while some progress has been made in this and many other industries, the demographic situation has not yet changed to the extent that either employers should consider abandoning affirmative action and diversity efforts or that the EEOC should consider banning such efforts.

The essential challenge to voluntary affirmative action and diversity programs comes in the form of a charge or complaint, commonly, but incorrectly, called a reverse discrimination claim. I say incorrectly called reverse discrimination because like the EEOC, I see such claims as just another race or sex discrimination charge. They are subject to the same proof burdens and standards as any other charge and are not “special” in any way. To apply the common misnomer of reverse discrimination implies otherwise. I welcome the clarification on this point provided by the newly issued Compliance Manual section updating guidance on how Title VII prohibits race and color discrimination in employment.

Classically, affirmative action and diversity programs that involved specific goals for the employment of minorities and women, including plans that linked managers’ compensation to the achievement of these goals have been the most frequently challenged. Typically in such claims, non-minority (white) or male individuals allege that their statutory or constitutional equal protection rights have been violated by means of an expressed or implied preference in employee selection for minorities or women.

Generally, an employer who hires an employee using race or sex as a basis for employee selection violates Title VII, absent a valid affirmative action plan. To justify such a plan under Title VII employers must follow a three-fold standard that was created in the seminal case of United Steel Workers v. Weber, 443 U.S. 193, 200-08 (1979): 1) a voluntary plan to address lack of diversity may be lawful if it is designed to eliminate manifest imbalances in traditionally segregated job categories; 2) does not unnecessarily trammel the interests of non-minority workers or create an absolute bar to the advancement of non-minority employees; and 3) is a temporary measure to eliminate a manifest racial imbalance and is not intended to maintain racial balance. If the employer is unable to make these showings, any reliance on the plan in selecting employees is usually deemed a violation of Title VII. Thus, any programs adopted by an employer to increase diversity within the ranks of its workforce, that call for the use of race and sex as a factor for determining the qualification for a position, risk challenges by non-minority/male employees and candidates.

In light of the Supreme Court decisions in the Michigan cases, the issue that still plagues law firms and other employers is: How can we diversify our workforces without using unlawful quotas in our employee selection practices? The point of clarification that the Grutter decision brings to light is that race-conscious affirmative action or diversity efforts that meet the Weber standards can withstand judicial scrutiny only so long as they are not practiced in a purely mechanical fashion. Thus, the automatic 20 plus points that the University of Michigan allowed for minority applicants to the undergraduate school was struck down in Gratz because it was mechanically applied without further examination of the individual receiving the additional points beyond the mere fact of minority status. On the other hand, the Law School’s analysis of applicants in Grutter was upheld specifically because minority status was one of many factors examined in an extensive review of each applicant’s complete portfolio of attributes and qualifications. It is this considered analysis of the individual, including minority status, that prevailed in Grutter while the consideration of minority status as triggering a benefit applicable to all members of that group which was struck down in Gratz.

With these principles as my guidelines, I have continued to counsel my clients and my affiliated associations that affirmative action and diversity programs can go forward as before. Returning to the law firm model for the sake of discussion, the question to be addressed is what courses of action might be taken by the management of a law firm that wants to engage in affirmative action to increase the level of diversity (i.e., the representation of minorities and women) within its ranks? The initial analysis has not been changed by the Michigan decisions. Just as before, the law firm employer needs to engage in some sort of self analysis (audit or census) to assess its current diversity situation. What is the current profile of the firm and how does that compare with the availability of qualified law students and experienced practitioners within the geographic area from which the firm draws its employees? Once that initial assessment has been accomplished, then the institution needs to determine what factors have impacted on that institution’s ability or inability to attract or retain minorities or women? Having completed that analysis, plans can be made to address the conditions and practices which contribute to the shortfall and, hopefully, to move the situation within the firm toward the diversity levels desired.

The following methods are examples of ways in which employers may lawfully diversify their workforces:

Recruitment

Advertising available positions in a broad spectrum of publications, including those that have predominantly minority or women subscribers/readers;

Recruiting at a wide variety of professional schools or other educational institutions, including those with predominantly minority or women students, and soliciting resumes from those even where no on-campus recruiting visits will be made;

Contacting minority and women’s civic and professional organizations, listing open positions with them, and soliciting applications from their constituents and members;

Participating in minority or women’s job fairs;

Hiring outside recruiters with instruction to find diverse applicants, and using recruiters that specialize in placement of qualified minorities and women;

Using the Internet as a recruitment asset;

Establishing professional contact with minorities early (i.e., high school mentoring programs and internships, college summer work and paralegal programs, summer clerkships and hiring students to work part-time during the school year).

Retention

Promote work-life balance initiatives for all employees. Find creative ways to allow women to succeed with business and their families. Flex-time, part-time work and telecommuting are just a few examples of initiatives firms have developed in this area.

Mentoring benefits all employees and takes place on an ad hoc basis in every institution. The object of formalizing the process of mentoring should be to assure that all employees get the benefit and not just those who have natural ties (family, school, club, etc.) to the institution’s senior staff.

Emphasizing lateral hires of experienced women and minorities has the dual effect of promoting recruitment at the entry level and retention at the more senior levels. Contacts through women’s and minority civic and professional organizations, as well as the wealth of talent in the ranks of government employment, are some sources that can be explored for this purpose.

Equal treatment programs can be designed to assure that women and minority associates get access to the kinds of work assignments, partner contact and client visibility necessary to position them for success.

Make diversity and EEO related administrative activity count as, using a law firm term “billable time”, for those employees who devote time to such projects. Thus, one typical disincentive for participation of employees at all levels is removed and the firm signals its commitment to the success of its initiatives.

Footnotes

(1) It is interesting to note that the author of the Grutter opinion, Justice O’Connor, recently published a book in which she describes the pressures that she encountered as the lone woman on the Supreme Court and the impact that the arrival of a second woman, Justice Ginsberg, had on the issue.

(2) Reportedly, more U. S. companies, including at least 68 Fortune 500 companies, filed amicuscuriae briefs in the University of Michigan affirmative action case than in any prior Supreme Court case.